OpinionNation: Should Jeffrey Sachs Be the Next World Bank President?

By

,&nbsp

,&nbsp

and

March 14, 2012

Professor Jeffrey D. Sachs of Columbia University speaks about potential geopolitical implications of the financial crisis at a panel discussion at Pace University in New York on October 16, 2009. Reuters/Nicholas Roberts

Editor’s Note: Jeffrey Sachs’s candidacy for World Bank president has drawn the backing of a number of progressives, who laud his focus on ending extreme poverty and hunger and improving agricultural outcomes in developing countries. Should we throw our support behind Sachs? John Cavanagh, director of the Institute of Policy Studies, and Robin Broad, professor of international development at American University, argue that his approach to development sounds good but remains flawed. Jeffrey Sachs himself responded. Immediately below, we’ve published Round Two. In this round, Mark Weisbrot, co-director of the Center for Economic and Policy Research, and president of Just Foreign Policy, who has supported Sachs’s candidacy, responds to Cavanagh and Broad.

Round Two

Why We Are Still Not Supporting Jeffrey Sachs to be World Bank President

Even today, Sachs’s approach to development remains top-down and formulaic.

by John Cavanagh and Robin Broadon March 20, 2012

Thanks to The Nation for creating the forum for this important dialogue on the World Bank presidency and also to Jeffrey Sachs for participating. Progressives should not expect that we will always march together to one song; we should savor the venues like this where we can debate as allies. We appreciate the many comments that have been posted and others that were sent to us privately.

We will use our limited “rebuttal” space to respond to two key issues.

Some progressives are urging us all to be more “strategic,” to support Sachs for World Bank president because he is better than possible Obama pick Larry Summers. We agree that Summers would be a terrible choice to head the Bank and, indeed, have joined tens of thousands to sign a petition to the Obama administration opposing his candidacy. However, the deadline for governments to announce their candidates is not until March 23. By then, several governments will nominate Sachs. The United States will announce a candidate. And, other governments may nominate someone else. After that point, it will be important for progressives around the world to debate who, if anyone, deserves our support. Before the 23rd, we believe that one productive strategic role for progressives is to critique the traditional presumption that Americans will support the European choice for the IMF head and Europeans will back the US choice at the Bank, virtually assuring that the rich countries get their way. We commend the Bretton Woods Project for their open letter arguing for a reformed selection process.

So too do we think it strategic for progressives to put forward the best candidates from across the globe, candidates with the qualifications to run a large organization and with the vision, humility, sensibility, and ability to listen to the 99 percent—all necessary to transform the Bank. Since we wrote our initial piece, dozens of people have sent us such names: Nobel laureate Amartya Sen, former UNDP head Gus Speth, urban poor advocate Sheela Patel, Greenpeace International chair Kumi Naidoo, UN Special Rapporteur on the Right to Food Olivier de Schutter, former Brazilian president Lula, and ActionAid International head Joanna Kerr, among others. Any could be a great leader of the Bank, but people and governments hesitate to put “best” names forward so long as the US-European grip on the selection process continues. If US progressives spent as much time promoting a “best” candidate as they are backing Sachs, that person might take-off as a candidate. Such a “best-person” list also presses those who are running to prove they match such high credentials, not that they are better than the worst.

3

4

5

Our second rebuttal issue has to do with the development record of Jeffrey Sachs. Knowledgeable commentators below have added their reflections on Sachs’s role in “shock therapy” and its impacts, particularly in Bolivia. In terms of Sachs’s current work, we note that nobody supporting Sachs has demonstrated that the Millennium Villages represent a “sustainable” future; whatever the fertilizer costs per person, fossil-fuel dependent agriculture is not the way forward. We have spent time on the ground with sustainable farmers and “farmer scientists” who are restoring the soil, cutting costs, and raising yields without chemicals. In the era of climate catastrophe, they are the future of agriculture. Millennium Villages and the World Bank should be on board to accelerate the transition to post-chemical, sustainable farming that is good for farmers, consumers, the land, and the climate. Agribusiness firms and fertilizer corporations will fight this transition every step of the way; we need a World Bank president who will stand up to them.

Sachs’s Candidacy for World Bank President Has Helped Create a Real Contest

by Mark Weisbroton March 22, 2012

Let me address the two points that John and Robin have made. The first concerns strategy. Four days before the deadline for nominations for World Bank President, and at the time of their writing, there was only one candidate nominated: Jeffrey Sachs. Thus, Sachs was the only opposition to whichever crony that Washington would pick, most likely Larry Summers. Sachs has a reform agenda for the Bank, including having the Bank focus more on treatment and prevention of infectious diseases, support for small farmers, education and primary health care, and renewable energy (as opposed to fossil fuels). He also has a track record of having fought for debt cancellation, an end to the World Bank’s policies of imposing user fees for primary health care and education, for the Global Fund to Fight AIDS, Tuberculosis and Malaria (which has saved millions of lives), increased access to essential medicines, and having been outspoken against war and other abusesby the US government. So this was an easy choice.

Now there are news reports that two more candidates may be nominated by developing countries: José Antonio Ocampo, a former Colombian finance minister, head of the UN Economic Commission on Latin America, and UN Department of Economic and Social Affairs; and Ngozi Okonjo-Iweala, currently Nigeria’s finance minister and formerly managing director of the World Bank under Robert Zoellick.

Get a FREE PDF copy of our 150th anniversary issue.

Given the timing of these possible late entries, I think Sachs—as well as the dozen or so governments that have supported him—deserves some credit for helping to open up a process that has been closed and restricted to a US “coronation” for sixty-eight years. If he had not busted through the saloon doors and shot up the place, it seems likely that the US political appointee would have prevailed. That could still happen, but now there is a contest including qualified candidates. The New York Times reported just nine days ago that Washington intends to “retain control over the Bank;” but now it will not be so easy. An analogy to the 2005 election of José Miguel Insulza as head of the Organization of American States is apt: for the first time in over fifty years, a candidate that the US initially opposed (and twice tried to block) was chosen. If the developing countries decide to take a stand, the US and its rich country allies will not be able to muscle their way through on the basis of their voting shares; that would be politically unacceptable.

And in five years, if you start now and can find governments to support someone that you like better, maybe you get them in the race next time. Regardless of outcome, Sachs’s candidacy will have helped pave the way for any future changes.

As for the second point on agriculture: I would say that we all favor organic agriculture and reducing the use of fossil fuels, but there are tradeoffs. You don’t eat organic food when it’s too expensive or inconvenient, and you don’t ride a bicycle or walk everywhere. Farmers in poor countries also have tradeoffs to make, and much tougher choices: e.g. their children and those of their community may be malnourished if they cannot produce enough food. They may want to add nutrients to the soil, in order to improve yields. So I would be careful about “one size fits all” policies regarding agricultural inputs. Poor farmers, villagers, and countries should not have to bear the brunt of the world’s transition to more environmentally sustainable agriculture, although they will do their part. And in any case it should be their choice, not imposed on them from outside.

Round One

Why We Are Not Supporting Jeffrey Sachs to be World Bank President

Even today, Sachs’s approach to development remains top-down and formulaic.

by John Cavanagh and Robin Broadon March 13, 2012

Jeffrey Sachs—economist, author and United Nations adviser—has publicly launched his candidacy to become the next World Bank president. Several prominent progressives whom we respect, including Congressman John Conyers, the Center for Economic and Policy Research’s Mark Weisbrot, and Just Foreign Policy’s Robert Naiman, have publicly endorsed Sachs’s candidacy. We disagree.

Over the years, Sachs has championed some key progressive policies, including debt cancellation for the poorest countries and a financial speculation tax to generate revenues to fight global poverty. He also advised the Congressional Progressive Caucus on their outstanding “People’s Budget.”

But this does not make Sachs the right person to lead the World Bank. For starters, this is a moment when we should be actively seeking a candidate from the South—someone who has walked the walk to embrace a bottom-up approach to development. Many names come to mind, including the South Centre’s Martin Khor and Charles Abugre of the UN Millennium Campaign. The so-called gentlemen’s agreement that allows the US government to select an American to head the bank was wrong in the 1940s; it is even more illegitimate now.

Moreover, Sachs’s overall policy record remains disturbing. Over two decades ago, he burst onto the scene as an adviser to governments that adopted “shock therapy” to tame inflation. In countries like Bolivia and Russia, the austerity became infamous for the havoc it wreaked on ordinary people.

Today, Sachs’s approach to development remains, at its core, top-down and formulaic. Elsewhere, we have critiqued Sachs’s book The End of Poverty for overemphasizing the power of trade and new technologies to put the poorest on a ladder to modernization. (He once famously said, “My concern is not that there are too many sweatshops but that there are too few.”)

Sachs has applied this approach in his well-publicized Millennium Villages in Africa. African colleagues have relayed criticisms that mesh with our own. Through these villages, Sachs has been a promoter of outside money to pay for (among other things) chemical-dependent “green revolution” farming. One village alone is reported to have had a $50,000 a year fertilizer bill. While this undoubtedly can lead to an initial boost in agricultural yields, it is hardly sustainable in the longer run economically (yields dwindle as soils get compacted from chemical inputs), socially (farmers drown in debts), or environmentally (fossil fuel-based chemical fertilizers contribute to climate change).

The reality of the villages’ chemical-dependent agriculture undermines Sachs’s reputation as an expert on climate change and other environmental issues. UN Special Rapporteur on the Right to Food Olivier de Schutter has pulled together years of evidence to show that small-scale farmers can grow ample food and can reduce fossil-fuel emissions by shifting from chemical to “agro-ecological” farming. The international small-scale farmer-led Via Campesina movement has embraced such an environmentally sustainable “food sovereignty” approach.

The next World Bank president should support this shift. Farmers and the poor need more control over natural resources, not a transfer of aid-dependent inappropriate technologies which serve neither farmers, nor consumers, nor the planet.

It is also time for a World Bank president with a bit of humility. Sachs has never, to our knowledge, apologized to those who suffered as a result of his early adherence to austerity measures, just as the bank has never apologized nor made reparations for its mistakes. The bank needs a president who cannot just look back at past mistakes, acknowledge them and learn from them but who also understands the real costs of such mistakes. Children starve. Natural resources are plundered. People die. If it is to have any legitimacy whatsoever, the World Bank needs a president who can gain the trust of and then learn from the experiences of farmers and fisherfolk and the urban poor who are all too often the victims rather than the beneficiaries of faulty World Bank loans and conditions.

Why I’m the Right Candidate for World Bank President

Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor?

by Jeffrey Sachson March 14, 2012

I greatly thank The Nation for taking up the important question of the next World Bank president. Several developing-country governments, including Haiti, Jordan, Kenya, Malaysia and Timor-Leste, have already nominated me, and several more will do so in the coming days, because they know me as somebody who has stood firmly with them for more than a quarter-century in the fight against poverty, hunger and disease. My track record as the adviser to UN Secretary General Ban Ki-Moon and to former UN Secretary General Kofi Annan on the Millennium Development Goals is warmly appreciated. My recommendations on how to achieve the MDGs have been very widely adopted and have contributed to significant advances in the fight against disease and poverty in recent years.

I would be the first-ever development practitioner and anti-poverty professional to be World Bank President, just what is needed given the bank’s mission of a “world free of poverty.” It is high time that the institution is led by a professional with a lifetime of commitment and achievement in the fight against poverty. The first eleven World Bank presidents came from banking, defense or politics.

While Cavanagh and Broad might not like everything about me or about my ideas in The End of Poverty, they should be more careful about what they wish for. The other US candidates for the position are certainly not development leaders and have no track records fighting poverty. Some have track records quite to the contrary. President Obama, as far as we know, is not considering Martin Khor, but he is considering Larry Summers. Who else but me among the widely rumored candidates has a record of standing for the poorest of the poor for decades: on debt cancellation, disease control, climate change, peace through development, support for popularly elected governments and many other issues?

The Bank president should be a highly qualified development leader from any country. I am seeking the position as a world candidate, not a candidate of the United States alone. I am gratified that so many governments around the world agree and endorse my candidacy. I hope that the US government agrees as well, since the US nomination will likely determine the next World Bank president.

My own track record has been consistently on the side of the poor. Starting more than twenty-six years ago I called for debt cancellation for over-indebted developing countries, and I led the fight for debt reduction from the earliest days of that battle, helping to win debt reductions for Bolivia, Poland, Nigeria and many other countries. I am also very proud that my recommendations a dozen years ago to establish the Global Fund to Fight AIDS, TB and malaria, and then the US PEPFAR and PMI programs, are now contributing to millions of lives saved from malaria, AIDS and TB.

There is some misunderstanding about the macroeconomics of stabilization in Bolivia, which is not surprising since those events occurred more than two decades ago. I urge readers to look at the data, not the rhetoric, and have prepared a short presentation showing the main economic outcomes. My role in Bolivia was to help the country end a devastating hyperinflation of 24,000 percent, fight successfully for debt cancellation and stabilize the economy, which allowed Bolivia to return to growth and significant social improvements. I worked there for two years, not more. I was not a long-term adviser. As for Russia, I simply wish that my advice had been heeded, both inside Russia and by the Western powers. Alas, Mr. Cheney was guiding US policies in 1992 (as defense secretary) and as a result, the United States and the West withheld vital help to Russia when it could have made a vast difference. What the West offered to Poland it denied to Russia. I resigned at the end of 1993, after two frustrating years, and after that was consistently an outspoken opponent of corrupt privatization. (Ironically, I have been often blamed for the very policies on privatization that I ardently opposed.)

As for the Millennium Villages, I warmly invite Broad and Cavanagh to check the facts. The Millennium Villages are African-run, with the agronomy at each village cluster based on local conditions. African agronomists are selecting the mix of organic and inorganic soil nutrients on the basis of local scientific recommendations in view of the soil types, soil nutrient conditions, crop varieties and climate conditions. There is no formula imposed from the outside. That would indeed be absurd. And the $50,000 a year for fertilizer for a village 5,000 people that Cavanagh and Broad cite comes to $10 per person in a year, a minimal sum to help get the poorest farmers out of poverty. It has done that. The project is not based on “giveaways,” as the initial fertilizer vouchers were used only to help impoverished farmers—without credit, income, bank balances or collateral—to get started in raising their productivity. The strategy has worked. The farmers now generally obtain their fertilizer as do farmers anywhere: with seasonal credits.

The results are very powerful, and continue to improve as the project progresses. Farmers’ incomes are increasing sharply in most sites, and that is net of the costs of farm inputs. Mortality rates are way down, and so too is stunting, meaning that under-nutrition is falling. Readers can follow Millennium Villages to get the most recent scientific publications of the project. An important publication will soon appear regarding the health improvements in the villages. Scholars interested in further information about the project can also contact the leaders of the project in East and West Africa.

John Cavanagh John Cavanagh is the director of the Institute for Policy Studies and author, most recently, of Development Redefined: How the Market Met Its Match (with Robin Broad).

Robin Broad Robin Broad is a professor at American University's School of International Service. Her most recent book, co-authored by John Cavanagh, is Development Redefined: How the Market Met Its Match.